Most industrialised countries have peaked carbon dioxide emissions during economic crises through strengthened structural change

As the climate targets tighten and countries are impacted by several crises, understanding how and under which conditions carbon dioxide emissions peak and start declining is gaining importance. We assess the timing of emissions peaks in all major emitters (1965–2019) and the extent to which past economic crises have impacted structural drivers of emissions contributing to emission peaks. We show that in 26 of 28 countries that have peaked emissions, the peak occurred just before or during a recession through the combined effect of lower economic growth (1.5 median percentage points per year) and decreasing energy and/or carbon intensity (0.7) during and after the crisis. In peak-and-decline countries, crises have typically magnified pre-existing improvements in structural change. In non-peaking countries, economic growth was less affected, and structural change effects were weaker or increased emissions. Crises do not automatically trigger peaks but may strengthen ongoing decarbonisation trends through several mechanisms.

According to Mensh's analysis, in periods of crisis, the socioeconomic systems become structurally ready for a new spurt of basic innovation leading to a new (and different) cycle of growth. Major innovations would tend to cluster in periods of recessions because crises induce firms to examine drastically different technological options [3]. Also, crises would accelerate the decline of old and usually less efficient economic industries and support the emergence of new and more efficient ones.
Authors in this stream [4] tend to consider deep crises as normal stages between the long-wave dynamics of techno-economic paradigm shifts: crises may form the tipping point towards the next (green) technological wave.
More recently, the question was examined by scholars related to "green Keynesianism" [5], focusing on reorienting fiscal and monetary policies and, more generally, on the green growth paradigm. It refers to the idea of reviving economic growth while resolving the problems of environmental decline and social injustice. The main purpose of green Keynesianism is, therefore, to recall the state for an active macroeconomic policy to tackle economic malaise and ecologic damage, channelling public spending toward low-carbon industries and environmentally friendly activities [6]. This view frames environmental protection as opportunity and reward rather than punishment or additional costs and looks for strategies to align economic growth and the environment. In the aftermath of an economic crisis, green growth can focus on creating new jobs in low-carbon sectors through public spending on green infrastructure and technologies -Keynesian green stimulus-, which stimulates aggregate demand. Thus, given the long lifetime of most energy infrastructures and technologies, countries should not miss the opportunities provided by crises to replace carbon-intensive technologies by cleaner alternatives.
Modelling exercises suggest that the design of recovery packages and related choices between brown or green investment in the aftermath of the COVID-19 crisis may be critical for achieving the long-term climate targets [7].
Related to the concept of "critical junctures" from historical institutionalism in political science [8], crises can open up opportunities for new institutional pathways if the forces they unleash give rise to changes in existing norms, regulations and institutions. While institutional and policy processes are pathdependent and 'locked' into a certain policy pathway characterised by self-reinforcing feedback effects, an exogenous shock or crisis may trigger a shift away from existing paths toward new trajectories [9].
In fact, given the permanent competition for scarce resources, economic downturns should strengthen the case for a suitable design of climate policies which lead to cost-effective emissions reductions from an intertemporal perspective. Proponents of this view then call for clear, long-term, and stable policy frameworks and more international cooperation.
However, scholars have also highlighted potential negative effects of crises on the process of decarbonisation. By making access to capital more difficult, economic recessions may hinder emissions reduction efforts through their discouraging effects on investments in general, including investments in low-or zero-carbon technologies [10]. Moreover, lower energy prices in times of crisis, may reduce the economic viability of cleaner technologies [11]. Political priorities may also shift again to decarbonisation: as both governments and the private sector focus on the recovery and on adapting their respective budgets, they may shift priorities away from climate policies. In this sense, crises tend to lead to deferment and postponement of environmental projects and investment as surviving the crisis and recovering becomes the aim, rather than becoming a "green" company or economy. Indeed, governments are likely to avoid burdening businesses and industries with extra costs and regulations when the economy is fragile and jobs may be at risk [11]. On the consumers´ side, lower incomes may encourage the consumption of goods with an inferior environmental quality (and lower prices). Thus, weaker environmental policies, reduced economic capacity for investments and depressed demand for greener products during crises may intensify carbon lock-in. This assumes, nonetheless, a low political will to implement climate policy in the short term, which may not be the case in many countries.
Transition studies scholars have also examined the impacts of crises on sustainability transitions [12][13][14]. Geels [13] highlighted the difficulty of the topic because crises are, by definition, confusing and contested phenomena which challenge existing ways of doing and understanding. Indeed, crises can disrupt existing institutions and cause uncertainty about future directions, which offers opportunities for substantial change that deviates from locked-in trajectories. Whether or not these opportunities are taken depends on how crises are interpreted (the dominant narrative) and the policy responses. In terms of the well-known multi-level perspective [15], crises can be seen as a shock at the landscape level. This shock creates pressures on regimes in concrete empirical domains (mobility, energy, etc.), where it may affect investor behaviour, availability of capital, public concerns, and the political will to act in favour of sustainability. At the niche level, many green innovations struggle against existing regimes. The broader diffusion of these niche innovations may require changes in the socio-technical regime: shifts in consumer practices, changes in public policies to favour green options, reorientations of incumbent firms and investors, and changes in public discourse [13]. Some or all these changes can emerge or intensify during periods of crisis.

Empirical evaluations of crises effects on decarbonisation
The empirical evidence on the effect of crises on CO2 emissions and emissions drivers is scarce and offers conflictive results. Ex-post evaluations suggest that the short-term effects (1-2 years) of crises could be substantial [16,17], but global emissions quickly bounce back, often overcompensating the crisis-related decrease. For example, Peters, Marland [18] found that the impact of the 2008-2009 global financial crisis on emissions was short-lived owing to strong emissions growth in emerging economies and a return to emissions growth in developed economies in 2010. The first studies of the Covid-19 crisis have pointed out that its effects on CO2 emissions are likely to be only temporary because this crisis has not affected the fossil fuel-based energy system architecture [7,19,20]. Siddiqi [21] argued that the Asian financial crisis in 1998 reduced energy consumption temporarily but delayed plans to invest in cleaner energy sources in affected countries. These analyses suggest that economic crises have no (positive) long-standing effects on decarbonisation.
However, other studies pointed to lasting effects. Using a sample of 68 countries for the period 1960 to 2014, Alsamara, Mimouni [22] found that the GFC has had permanent effects on CO2 emissions and that these effects vary by countries` income level and depending on the severity of the crisis at the national level. Jalles [11] investigated a sample of 31 advanced and 55 emerging and low-income countries between 1980 and 2012. Their results suggest that financial crises, in general, led to a statistically significant fall in CO2 and methane emissions; however, the effects can vary depending on the type of crisis (e.g., banking, currency or debt crisis) and on the monetary and fiscal situation before the crisis hits. By studying the effects of the collapse of the Soviet Union on energy intensities, Ürge-Vorsatz, Miladinova [23] found that energy sector and economic restructuring in the 1990s were very important in bringing down the high-energy intensities and carbon emissions in former communist countries in Easter Europe, particularly Poland. Similar results were found for a sample of 15 post-soviet republics [24]. Sobrino and Monzon [25] showed that the global financial crisis represented a turning point for Spanish CO2 emissions from the transport sector due to a reduction in road transport and improved energy efficiency.
In sum, ex-post evaluations of crises effects are inconclusive and have not systematically investigated the effects of crises on structural change, which is paramount for decarbonisation in the long run.

Studies on CO2 emission trends and drivers
The interlink between energy, economic growth and environmental degradation has been investigated through a variety of methods and approaches [26][27][28], including econometrics and decomposition analysis. Index Decomposition Analysis (IDA) has been widely used since the 1980s in studies dealing with drivers behind changes in energy consumption or energy intensity of a particular sector. Since 1990, IDA has been extended to study GHG emissions drivers, particularly energy-related CO2 emissions. Xu and Ang [29] reviewed 80 IDA-based articles published from 1991 to 2012. These articles cover a wide range of developing and advanced economies and have been conducted for all major emissions sectors -electricity, industry, transport, and residential-including economy-wide studies. The review shows that energy intensity change was generally the critical driver of changes in aggregate carbon intensity in most sectors and countries. Taking energy intensity as a proxy for energy efficiency, this means improvements in energy efficiency have been the main driver of decreases in aggregate carbon emission. In contrast, the contributions of "activity structure" change and that of "carbon factor" change have been less significant. Besides, in all IDA studies, increases in overall activity levels invariably led to increases in emissions. Some different patterns appeared when comparing specific sectors and developing versus developed countries. Methodologically, different decomposition techniques have been applied with diverse complexity; global studies use the simplest techniques, while country or sector-specific studies usually apply more detailed decomposition methods [29].
More recently, a growing number of IDA-based studies have focused on China, the global higher CO2 emitter, in sectors like transport [30,31], industry [32], residential [33], and electricity [34][35][36][37]. Analyses show that reduction rates in CO2 emissions intensity markedly accelerated after 2013, the year when China´s Clean Air Action regulation was implemented; the authors suggest that pollution regulations on power plants and industries have been the most effective mitigation measures [38]. Research also highlights spatial heterogeneity among CO2 dynamics in different Chinese provinces [33,39,40]; for example, while the western regions performed better in clean power penetration, the eastern regions performed better in thermal generation efficiency [34]. Outside China, IDA studies focused on countries in Latin America [41][42][43] and Europe [44,45].
A recently published article reviews trends and drivers of GHG emissions in ten global regions and five economic sectors from 1990 to 2018 [46]. Overall, they show a moderate decarbonisation trend of energy systems in Europe and North America, driven by fuel switching and the increasing penetration of renewables. By contrast, fossil-based energy systems have continuously expanded in rapidly industrialising regions, only very recently slowing down in their growth. Papers focusing on global trends assessed Global CO2 Emission Inequality through differences between production-based and consumption-based emissions [47] and the role of international trade in emissions [48] but paid little attention to the impact of crises. Apart from some crisis-specific or country-specific studies, no article assesses globally the role of crises on structural change and CO2 emissions peaks, which is the aim of our article.
A few papers have analysed countries that have peaked emissions (Table S1). Using data from the Emissions Database for Global Atmospheric Research (EDGAR) v5 database, Lamb, Grubb [49] identified 24 countries showing sustained reductions in annual CO2 and GHG emissions between 1970 and 2018, in total equalling 3.2 GtCO2eq since their respective emissions peaks. They found three groups of countries with different emissions pathways: six former eastern bloc countries, where emissions declined rapidly in the 1990s and have continued a downward trajectory since; six long-term decline countries, which have sustained reductions since the 1970s; and 12 recent peak countries, whose emissions decline began in the 2000s; In all cases, emissions reductions were achieved primarily in the energy systems sector. Most countries achieved emissions reductions alongside sustained economic growth, and some approached the fast annual rates of change that will be needed across the world in the coming decades to limit warming to 2°C. This paper did not investigate drivers leading to such GHG and CO2 emissions peaks. Le Quéré, Korsbakken [50] examined drivers of declining CO2 emissions in 18 developed economies. They show that, within this group, the partial displacement of fossil fuels by renewable energy and decreases in energy use explain decreasing CO2 emissions. Besides, renewable energy policies in these 18 countries have supported emissions reductions. These papers did not examine the impacts of economic crises on such emission peaks.

Supplementary Note 3: Decoupling between GDP and CO2 emissions
A decoupling analysis is a commonly used approach to understand whether a variable grows while another variable is increasing or decreasing. In environmental science, this is often done with GDP and emissions of some pollutant or consumption of a material; here, we investigate the coupling state of  We distinguish between five decoupling states following the approach proposed by Naqvi and Zwickl [57] and use them to analyze changes in carbon emissions and economic growth dynamics in the countries studied. First, "absolute decoupling" requires that CO2 emissions decrease while GDP grows, so ΔCO2 ≤ 0 and ΔGDP > 0. This corresponds with the "green growth" discourse, seeking to continue growth while reducing (and eventually eliminating) emissions. Second, "relative decoupling", occurs when both variables increase but the economy grows faster than the environmental bad [56], such that ΔGDP > ΔCO2. This state corresponds to "low-carbon growth" and is, barring massive CO2 removal schemes, incompatible with the net-zero emissions implication Paris Agreement. Third, "expansive coupling", occurs when both variables are positive but in this case, CO2 emissions increase faster than economic output. We include two last states referencing the situation where economic activity decreases. Fourth, "negative decoupling" refers to the possible but unlikely situation in which economic growth is negative, but emissions increase. Fifth, "negative coupling" occurs when both CO2 emissions and economic output decrease, referring to a "de-growth" situation. Only the first and fifth states mean that the economy is decarbonizing. Negative coupling, however, may imply more severe social and political troubles and is still not considered a target by any government, although it is gaining attention in climate policy research [59]. faster than other countries, even with a booming economic activity, suggesting that substantial transformation has happened in the Irish economy and its energy system in the last decade.
The two exceptions in this group are Italy and particularly Greece, which have been in a state of negative coupling since the Global Financial Crisis. Both countries peaked emissions at the beginning of the crisis and then experienced deep recessions accompanied by a substantial reduction in emissions. The GDP started to grow again but had not yet reached pre-crisis levels in 2019.

Supplementary Note 4: CO2 emission peaks in Denmark and Switzerland
Denmark (1998) and Switzerland (2001) are the only two peak-and-decline countries in our group where emissions peaked outside major economic crises. Switzerland had a minor national recession in 2002-03, and during the recovery years, the energy intensity decreased firmly, preventing emissions from increasing. There was no national economic crisis in Denmark around the emission peak year, and structural change alone explained the peak in emissions, due to substantial improvement in both energy and carbon intensities.

Supplementary Note 5: Changes in the energy mix in peak-and-decline countries
A group of Western European countries were the first to peak CO2 emissions during the first and second oil crises. These early peaks were associated with a decrease in oil consumption (Table S5) mainly due to two factors: first, the implementation of conservation and energy efficiency measures as a response to the crises; and second, the acceleration of nuclear power development (Table S6), to replace oil power generation. Additionally, some countries like Sweden accelerated the deployment of biofuels. RD&D in renewables for electricity generation like solar and wind increased, but the deployment of these technologies was very low, not affecting the energy mix in the 1970s.
In countries that peaked during the collapse of the Soviet Union, the fuel switch effect was less significant. These countries experienced a substantial drop in primary energy consumption from all sources, particularly oil (Table S7). When Russia and the Baltic countries recovered from the deep recession, oil consumption remained substantially lower than before the crisis, translating into energy intensity improvements.
The fuel switch in the countries that peaked during the Global Financial Crisis was different. Most of these countries saw a decrease in coal consumption during and after the crisis (Table S8). In the case of Spain, one of the countries hardest hit by the crisis, coal consumption fell by half between 2007 and 2009. Simultaneously, the deployment of renewable energy did not stop and even accelerated in some cases, such as in the US (Table S9). Even in countries that suffered strong recessions, such as Italy and Greece, the deployment of renewable energies continued. The decrease in coal consumption and the increase in renewables improved the carbon intensity in this group of countries. In parallel, oil consumption continued to decrease while gas consumption increased, contributing to improvements in carbon intensity.       *Includes renewable power (apart from hydro, which is reported separately) and biofuels "Input-equivalent" energy is the amount of fuel that would be required by thermal power stations ^ Less than 0.005. Source: [62]